Friday, 29 May 2009

“If you do not measure it, you can not improve it”

…as Lord Kelvin (Sir William Thompson) once said.

Is this why so many health clubs struggle to improve their member (and staff) retention and are so focused on sales?

Sales are very easy to measure in any industry, hence the focus, I guess. However retention seems to be much more difficult, particularly in the relatively young fitness industry. There are many different ways of working out member retention figures, and countless experts to tell you how to do it. A relatively straightforward formula is explained very clearly here.

Most retention definitions look at a 12 month membership percentage retention, which is a good measure, but this can be difficult to affect in the short term. Improving your 12 month retention from 60% to 70% will not happen overnight, but is a good target for 6-12 months time.

Member attrition is a more fluid metric, and more straightforward to calculate. (Attrition rate – The [average] number of members per thousand who cancel every month)
Attrition is easier to affect each month, and it's also easy to set individual or club targets. If you improve (reduce) your attrition rate, you will increase retention.

Ultimately, as Lord Kelvin told us, if you want to improve something, you need to measure it. Work out how you’re going to do this to start with, then set your targets, and you’ll soon be making a difference.

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